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Hershey's first new brand in 30 years: Soft caramels

By Mae Anderson, AP Business Writer

Updated:
10/10/2013 03:21:43 PM EDT

This image provided by Hershey on Wednesday, Oct. 9, 2013 shows the their new Lancaster Caramel Soft Cremes. The company is launching a new candy brand, its first new brand in 30 years, a soft caramel creme line called Lancaster. (Hershey/AP Photo)

Chew this.

The Hershey Co. is launching a new candy brand, its first new brand in 30 years, a soft caramel creme line called Lancaster. And for the first time it is taking a double barreled approach, debuting the candy in the U.S. and China at once.

The move comes as China increasingly becomes a focus for U.S.-based consumer goods companies that are seeking to offset slower growth in developed markets like North America. Hershey, which makes candy such as Kit Kat, Twizzlers and Hershey's Kisses, said its most recent quarter that new products in both the U.S. and overseas helped its net income rise 18 percent.

"China and the U.S. are major focus markets for the company," said Steven Schiller, senior vice president of sweets and refreshment. China is the second largest sweets market behind the U.S., he added.

The Lancaster name stems from founder Milton Hershey's first candy company, The Lancaster Caramel Co. founded in 1886. And the candy comes after two-and-a-half years of research into consumer tastes and the global confectionary market.

A category the company calls "comforting richness" -- caramel or milk-based soft candy -- was under tapped, Hershey found, even though at $1.5 billion dollars it was big business in China.

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Caramel is also a fast-growing category globally, Schiller said, growing faster than chocolate and other non-chocolate candies. "It is one of the fastest growing segments in the food industry," Schiller said.

So Hershey developed caramels that could fit into the niche. The products in each country aren't completely the same, but tailored to their markets. In the U.S., Lancaster caramel's will come in three flavors: caramel, vanilla and caramel, and vanilla and raspberry. In China, where the company already sells Hershey's Kisses, Hershey and Ice Breakers, the candies will be more similar to milk-based candies that are popular in that country.

The target demographic is men and women in their twenties and early thirties. The candy will hit store shelves in January 2014 and come in two sizes for about $4 and $2.50. In China, it has already launched in three cities, with wider distribution set for 2014.

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